Bethlehem plans steel-price increase

May 27, 1992|By Ross Hetrick | Ross Hetrick,Staff Writer

Betting that the economy can support a steel-price increase, Bethlehem Steel Corp. has told its customers it will raise the listed price of flat-rolled steel 1.7 percent to 2.9 percent effective July 5.

The modest price increase comes after two years of declines equal to 3 percent annually, which have returned steel prices to their 1981 level. But one analyst said the time might be ripe for a price increase.

"The environment hasn't been this good in two years," said Michael M. Via, director of research for Anderson & Strudwick Inc., a brokerage in Richmond, Va. He cited an increase in customers at automobile showrooms and a 16 percent jump in sales of major appliances in March. "There's a better chance than there had been" for an increase to take hold, he said.

However, major steelmakers agreed earlier this month not to increase prices during the next model year for General Motors Corp., which could establish a pattern for other steel customers.

Low prices and weak demand have devastated Bethlehem's profits in the past two years. The company lost $463.5 million in 1990 and $767 million last year.

Bethlehem's price increase would add $10 a ton to the price of steel sheet products. The new prices will be $355 a ton for hot-rolled steel, $520 for cold-roll sheet and $585 a ton for galvanized and Galvalume sheet, Bethlehem said. However, the actual price that customers pay, known as the "transaction" price, ranges from $65 to $110 below the list price for steel sheet.